The Bush tax credit became the Obama law and has since added about $20 billion to the budget deficit. But it has cost homeowners a good deal more than that. Consider Minneapolis, with its 10 percent fall in home prices. Anyone who used the tax credit to buy a house worth $80,000 will have lost the full $8,000 of the tax credit, assuming the 10 percent decline is valid across all house valuations.

And unfortunately, it is not. Look at the invaluable housing-market website Zillow, run by the economist Stan Humphries, and you will see that the situation is considerably worse than the Minneapolis example would imply. Zillow differentiates between upmarket and downmarket housing. Nationwide, Zillow estimated this spring, there was an 8.2 percent drop in home valuations. But the top tier of houses lost only 4 percent of their value, the middle tier lost 9 percent, and the least desirable part of the housing stock lost 14 percent. Had you bought an $80,000 house in Minne-apolis, your house would likely have lost not $8,000 but at least $11,200, and probably more. That is, you would have lost the whole value of the federal tax credit, and thousands more besides.

Once again the government lured poor people into buying homes and then the market wiped out any equity they might have had.

People wonder why some conservatives are libertarians are reflexively anti-government. This example shows that about 90% of the time, government programs make things worse.